RISKS THE SOUTHWEST AIRLINES TAKES.

1. SOUTH WEST AIRLINES HAVE TO RUN THEIR FLIGHT EVEN IF ONLY HALF OF THE SEATS ARE FULL.

IN SUCH SITUATION GOES ON PREVAILING, THE AIRLINES HAVE A RISK OF EARNING REALLY LOW REVENUE.

2.PRICE WARS

South West Airlines is at constant price wars with its competitors.In such price wars, sometimes South West is forced to keep the prices of tickets really low.

Thus in this case too the airline runs a risk of eventually earning low revenue

Southwest faces the same risks that other airlines face, such as the potential for rising fuel costs or a downturn in the economy.

3.FUEL FIGHTS

4.LABOUR

Southwest may also face continued pressure from rising labor costs. Most of Southwest’s major union contracts are open for amendment, and the ultimate cost impact from those negotiations is uncertain at this time.

5. NON-OPERATING AIRPORTS

Southwest has to face off with bigger Delta Air Lines Inc. at its primary hub of Atlanta, the world’s busiest airport and the only major U.S. city Southwest doesn’t serve. 

6.COMPETATION

Concerns also include increased competition both from Southwest’s large network rivals that are now financially healthier than they have been in the past, and from rapidly growing low-cost carriers. Southwest had long been the only major U.S. air carrier to be considered investment grade. But Fitch in June added Alaska Air Group, parent of Alaska Airlines and Horizon Air, to the elite list.

Despite off all these risks southwest airlines didn’t lose its place till today!

It was and is being loved by both customers and employees.That is what is making southwest airlines successful.

RECAP:1.South West Airlines have to run their flight even if only half of the seats are full. In such situation goes on prevailing, in that case the airlines have a risk of earning really low revenue.

2.South West Airlines is at constant price wars with its competitors. In such price wars, sometimes South West is forced to keep the prices of tickets really low.

3.Southwest faces the same risks that other airlines face, such as the potential for rising fuel costs or a downturn in the economy.

4.Southwest may also face continued pressure from rising labor costs.

5.Concerns also include increased competition both from Southwest’s large network rivals that are now financially healthier than they have been in the past.

6.Southwest had long been the only major U.S. air carrier to be considered investment gradeSouthwest will also face off with bigger Delta Air Lines Inc. at its primary hub of Atlanta, the world’s busiest airport and the only major U.S. city Southwest doesn’t serve.

Credits: Images.google.com

A Presentation by Sravya Tanmayee

SRAVYA TANMAYEE, IIITDM-kancheepuram

during an intern by

Prof. Sameer Mathur ,IIM Lucknow

Thank you!